Rongan Property: Needs More Policy for Land Restoration

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Rongan Property [000517:CH] is a Chinese real estate developer that mainly engages in residential properties. An analysis of the company's environmental, social, and governance policies are as follows:

Environment: Conducts Inadequate Environmental Friendly Programs

Rongan has continued to promote green and sustainable development in the property industry. The company has implemented environmental protection policy in property construction and carried out multiple programs to innovate green technologies. For instance, last year, Rongan introduced intelligent anti-haze and green products to its residential districts, which also received an urban habitat award from the Ningbo Municipal Government.

Additionally, in 2019, Rongan has deployed various water-saving systems to all real estate projects in Ningbo, Jiaxing as well as some programs in Chongqing and Taizhou. Specifically, the company uses a permeable pavement to accelerate the infiltration of water through the vehicle and pedestrian pathways. It also plants grass in the ditch to mitigate the soil erosion caused by running water.

However, Rongan did not report any efforts to create a green office or reduce the environmental impact of transportation used for its staff.

As a real estate developer, Rongan did not carry out programs to restore land used for construction or the surrounding environment, according to its 2019 CSR report. It has also failed to report on how it handles construction wastes.

Social: Prioritizes Employee Benefits and Development

As of December 2019, Rongan has employed 1,595 staff, including 615 females. To build up employees’ skills and strength, the company has organized around 120 training sessions in 2019 and added 380 new online courses.

Rongan also claims to secure the rights and interests of its employees, baring forced labor and child labor. The company has also implemented the policy, promising not to discriminate staff based on their difference on gender, age, religious belief, etc.

It also implements a flexible remuneration mechanism, offering employees fixed salaries and performance-linked incentives.

From the customer perspective, Rongan has pledged to create a comfort living environment for residents. In 2019, Rongan’s property management unit reported customer satisfaction of above 95% in 2019. Nevertheless, the company did not disclose efforts to protect customer health and safety.

Moreover, to safeguard employee safety at construction sites and eliminate security incidents, the company has formulated a plan to conduct quarterly assessments on property projects and hence enhance project quality.

In regards to its engagement with suppliers and partners, Rongan did not report on policies to maintain fair competition or any programs to reduce bribery and corruption.

In the fight against the COVID-19 pandemic since January, Rongan has donated RMB1.89m worth of medical supplies to Wuhan’s hospitals on the front lines, including 1m facemasks. Since February 15, the company also organized nucleic acid tests for all employees.

Notably, Rongan did not conduct targeted poverty alleviation programs in 2019.

Governance: Values Minority Shareholders’ Involvement

Rongan claims to strictly comply with relevant rules and organize regular general meetings of shareholders to secure investors’ interests and rights, which also ensure minority shareholders’ involvement in business operation.

Rongan’s Chairman Wang Jiufang and its largest son, Wang Congwei, each hold a 50% stake in Rongan Property’s largest shareholder Rongan Group. Rongan Group owns a 47.93% stake in Rongan Property. Meanwhile, Wang Jiufang also directly owns 29.68% of Rongan Property’s equities.

Rongan Property’s Board of Directors consists of a Strategy Committee, an Audit Committee, a Nomination Committee, and a Remuneration & Assessment Committee. The board also hires eight members including three independent directors.

In 2019, the total remuneration received by all directors, supervisors and senior executives amounted to RMB6.5m.


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